PART 4. 
TITLE, CREDITORS AND GOOD FAITH PURCHASERS



 



§490:2-401  Passing of title; reservation
for security; limited application of this section.  Each provision of this article
with regard to the rights, obligations and remedies of the seller, the buyer,
purchasers or other third parties applies irrespective of title to the goods
except where the provision refers to such title.  Insofar as situations are not
covered by the other provisions of this article and matters concerning title
become material the following rules apply:



(1)  Title to goods cannot pass under a
contract for sale prior to their identification to the contract (section
490:2-501), and unless otherwise explicitly agreed the buyer acquires by their
identification a special property as limited by this chapter.  Any retention or
reservation by the seller of the title (property) in goods shipped or delivered
to the buyer is limited in effect to a reservation of a security interest. 
Subject to these provisions and to the provisions of the article on secured
transactions (article 9), title to goods passes from the seller to the buyer in
any manner and on any conditions explicitly agreed on by the parties.



(2)  Unless otherwise explicitly agreed title
passes to the buyer at the time and place at which the seller completes his
performance with reference to the physical delivery of the goods, despite any
reservation of a security interest and even though a document of title is to be
delivered at a different time or place; and in particular and despite any
reservation of a security interest by the bill of lading:



(a) If the contract requires or authorizes the seller
to send the goods to the buyer but does not require him to deliver them at
destination, title passes to the buyer at the time and place of shipment; but



(b) If the contract requires delivery at destination,
title passes on tender there.



(3)  Unless otherwise explicitly agreed, where
delivery is to be made without moving the goods:



(a) If the seller is to deliver a tangible document
of title, title passes at the time when and the place where the seller delivers
such documents, and if the seller is to deliver an electronic document of
title, title passes when the seller delivers the document; or



(b) If the goods are at the time of contracting
already identified and no documents are to be delivered, title passes at the
time and place of contracting.



(4)  A rejection or other refusal by the buyer
to receive or retain the goods, whether or not justified, or a justified
revocation of acceptance revests title to the goods in the seller.  Such
revesting occurs by operation of law and is not a "sale". [L 1965, c
208, §2-401; HRS §490:2-401; am L 2004, c 163, §8]